When CE Pro’s Julie Jacobson talks about “Uberizing” your smart-home business, she first cautions: Don’t be so literal.

“We’re not talking about on-demand like Uber,” she said during a 30-minute CEDIA Talkat ISE 2018. “Take the best of what some of these companies are doing, and the best of what you’re doing, and try to make a nice blend for your customers.”

She said the presentation was not a lesson on how to be like Uber or how to sell DIY products, but more “an exercise in business creativity” that hopefully would inspire integrators to “experiment” with new business models for a new era of smart-home delivery.

Even so, she did provide practical ideas for responding to the on-demand economy – like paring down product offerings, standardizing on programming, creating simple and predictable pricing models, and doing everything possible to keep customers from actually having to talk to a real person.

The concept of “low-touch,” frictionless transactions dominated much of Julie’s presentation.

She recalled the hate mail from a decade ago when she wrote about buying a big-screen TV from Amazon.

“You must hate custom,” some readers charged. “I can’t believe you ordered from Amazon just to save a few dollars.”

Ten years later at ISE, she explained, “Well guess what. I don’t know if I saved a few dollars, and it didn’t really matter. What mattered is that it was just so simple. I went online, I searched a few things, I pressed a button and the next day it was delivered. It was fine. Done deal. I didn’t have to talk to anyone.”

Even today, she says, most home-technology integrators think their clients and prospects want to be pampered by doting salespeople and project managers, when really they just want to place their order, get the job done and paid for, and get those installers out of there.

“We’re still of the mentality in the industry that people like to talk to us,” she says. “They don’t. Nobody wants to talk to us.”

She likened the integrator's business process today to that of a taxi company's back in the day, when customers would call the dispatcher, get some vague idea of when a cab might arrive, call again when the cab doesn't arrive, wonder which cab is theirs, and then have absolutely no idea how much the journey would cost with the metered fare and all the surprise "extras." The only virtue of the taxicab model is that riders could get a blank receipt and pad their expenses. With Uber, the record is irrefutable, down to the penny ... and the driver and the timing, and the route ....

Ultimately, it’s not about how low their prices are but rather how easy it is to do business with them.

‘We Can’t Do That’

When discussing the virtues of businesses like Amazon and Uber, Julie says, integrators typically roll their eyes and insist, “We can’t do that.”

She wonders: What is that? What do they offer that is so special? Ultimately, it’s not about how low their prices are but rather how easy it is to do business with them. What they do is make it simple for consumers to:

Learn about products and services

Vet the company and the individual providers

Place an order

Schedule delivery and services

Receive services

Pay for everything

Complain by way of feedback and reviews

And consumers never have to talk to anyone, except when the technicians arrive to mount the TV or install a smart-home system.

When integrators say they can’t compete, their reasoning typically revolves around these four fundamentals:

They sell and install the easy stuff. What we do is too complicated for those kinds of models.

They have unrivaled logistical systems and limitless IT resources. We couldn’t possibly match their efficiency.

They can offer unbeatable prices because of their efficiency, as well as access to inexpensive in-house and contract labor, and of course massive scale and leverage with vendors. So we have to compete on specialty products and customized service.

They can provide products and services on-demand, or at least very fast, because of their massive fleets, flexible drivers and local distribution centers. We don’t keep much inventory on hand, and our labor pool is fixed and finite.

Julie systematically addresses all four of these sticking points in her presentation (video above).

Most technology products are not that visually appealing. Black boxes and tangled wires do not add to the character of a high-end smart home project. Luckily, our integrator readers have a number of clever solutions so these components don’t have to be visible in your next project.

About the Author

Jason has covered low-voltage electronics as an editor since 1990. He joined EH Publishing in 2000, and before that served as publisher and editor of Security Sales, a leading magazine for the security industry. He served as chairman of the Security Industry Association’s Education Committee from 2000-2004 and sat on the board of that association from 1998-2002. He is also a former board member of the Alarm Industry Research and Educational Foundation. He is currently a member of the CEDIA Education Action Team for Electronic Systems Business. Jason graduated from the University of Southern California. Have a suggestion or a topic you want to read more about? Email Jason at jknott@ehpub.com

Comments

I’m seeing a lot of things projected onto this article that I didn’t find in it. If someone can get past the slightly inflammatory language in part of it, and read the article non-defensively, I think it’s an excellent article (fellow posters are welcome to check out our portfolio at vidacom.com before accuse me of “not getting it”).

Every day I choose to do business with firms that make it “frictionless” to do business with them. That does not necessarily have anything to do with being the cheapest. Many luxury experiences are luxury experiences precisely *because* they are frictionless. You’re car needs service and the car dealer drops off a car at your house and takes the old one in for you - that’s a frictionless experience.

Our industry overall should try to do better and making things frictionless. Depending on the market you serve that could mean different things.

Posted by Adroit1 on March 4, 2018

I forgot to mention two other extremely important things that make integrators different from the Amazon/Uber models. When the installation is complete, the job is not finished. The integrator must teach the client how to use the equipment that was just installed. Without this 2nd to last step, the entire installation will be a failure. The client must be able to understand the system, and how to use it, without needing to call every time something doesn’t work just the way they thought. Teaching, and a small manual, are critical, more talk. The final is follow up. Once the owner is comfortable with using the system himself, or herself, give them 3 days with it. Then call them after the 3rd day to make sure they are enjoying themselves with the new system and ask if they have any questions, or want anything in the programing different to meet their needs better, again more talk Give them 10 days after that and check with them again, more talk. Wait 3 months and check again, and then contact them every 6 months after that, more talk. This makes them feel like you are watching out for their best interests, it keeps you in their minds for recommendations to their friends, and it give you an opportunity to upsell. That is what separates integrators from Amazon/ Uber, more talk.

Posted by Julie Jacobson on March 4, 2018

Thanks for the comments, Adroit. My very first caveat in all of this was: “Don’t be so literal.” I espoused no particular business model, just encouraged dealers to explore new ways to think about serving customers with the efficiency, predictability and friction-free experience that companies like Amazon and Uber provide. And yes, we have entered an Uber era but integration companies still look like taxi operators to consumers. Although I thought I stressed it enough in the presentation, I guess I didn’t get across well enough that this was not about competing with Amazon in pricing and service. The same rules apply at the high end. If I’m looking to hire the best limousine service and best personal tour guide for a lavish vacation ... I’m still going to want an Uber/Amazon type of experience.

Posted by PaulRyanDesign on March 4, 2018

@Adroit1- I understand where you’re coming from. I can’t speak for Julie, but the point I’m trying to make is that the landscape is changing like we’ve never seen it. You have the 3 most powerful companies in the world competing for your customers. And the customers are changing. As mentioned the next generation of your customers aren’t interested in sitting down at the kitchen table. They value online reviews more than they value referrals from friends and family. So how do you reach these people? How do you sell quality audio to someone who walks around with earbuds in their ears. How do you sell doorbird over ring? You get my point. This is a conversation that needs to be had. I might be way off the mark. Tell me why I am.

Posted by Adroit1 on March 4, 2018

I watched the video and it is a recipe for disaster, to say nothing of insulting. I don’t know any reputable integrator that has the kind of employees that behave like the pictures she showed The business model Julie is espousing will drive an integration company to bankruptcy in, at the most, 5 years. She suggests competing with the big box stores. A very quick way to go out of business. They have the volume for pricing and the ability to undercut your pricing in installation as well, as they only pay their employees $15- $18/hr, and it will only get worse as they move further into the installation world.
When I started in this business, the first plasma TV’s were coming out. This was a boon to the installers because the large box TV’s were so huge that it took 4 strong men just to lift 1. The 42” flat screen plasma TV only weighed 87 pounds, but cost $17,000.00. We would make $5000.00 per sale, and it only took 2 men to deliver it. Fortunately for us, the kind of people who could afford one of these had the money to buy other expensive components. We thought selling these TV’s was the best of easy money. My boss had us attend a seminar about 6 months after I started. The speaker( I wish I could remember has name) told us 3 very important things. 1) These prices would not last long, so be prepared to actually earn a living. 2) If you want to stay in business, never compete with the big box stores, only go for the high end customer. If not you won’t last 5 years. 3) You are not selling product, you are selling service, knowledge, and experience. Treat these people as clients, not customers. That was in 1997. I followed that advice. Those at the seminar that didn’t are gone. Julie’s advice to have a business that in any way directly competes with big box stores makes the assumption we are selling product and installation. That is wrong. We are a very small company. Our jobs range in size from a week to 6 months. My 2 techs make over $35/hr plus benefits. Those prices for installing Julie had on the screen would put me out of business in a month. Just the truck roll costs over$100.00 She is also wrong when she says our clients don’t want to talk to us. Mine want to talk all the time. Since I am dealing with a clientele that has more money than they really know what to do with, when they read about new technology, no matter the cost, they want to know if it is something they can use. This means we have to keep up with that technology all the time, because the reason I am installing and integrating their homes is because they trust what I am saying. I am no different than any other reputable integrator. We all strive to be not just the guy who makes their life easier, safer, and more fun, but the guy who will be there for them when something goes wrong, at any time. What Julie described are just installers, and Best Buy and Amazon already have them, at lower rates than you can ever charge.
Her examples of Uber, Amazon, and Vivint are probably not the best. Uber doesn’t pay its drivers what it should. Amazon treats both its vendors and employees like crap. Amazon has 3000 unfair labor complaints against it in Great Britain alone, with thousands more in the US. There are a number of large vendors that are contemplating no longer selling through Amazon, the volume is spectacular, but there is no profit. And Vivint in Ft Lauderdale has been a total disaster because they do not support their product in customers homes.
I have to address PaulRyan Design about the manufacturers that forbid selling their product online. Those products are what separate integrators from the big box stores. The manufacturers are protecting us from the likes of Amazon. We work on margin and labor. Selling them same product online destroys any margin because the only way to sell online is with the cheapest price.
You are the first company I have ever heard of that wants to destroy their margin. If the dealers you talk to want to sell online, let them sell inferior products at no margin. We only sell the best products we can find, and our customers trust that we are selling them that product at a fair price. If a dealer doesn’t like way a manufacturer wants to do business, they are free to buy from another manufacturer. A while ago, we used to sell Marantz. They made us jump through hoops to be able to sell their products. Then one day I saw their products at Brandsmart, a Florida based discount megastore. While not the same model numbers, now their name became associated with cheap. We stopped selling any Marantz that day. That is why certain high quality manufacturers keep their products off the internet.

Posted by Julie Jacobson on March 2, 2018

Paul, that is a fantastic question and I am very curious to hear their responses. I’ll shoot you an email.

Posted by PaulRyanDesign on March 2, 2018

This is a great article Jason. The video is unlistenable because of whatever the background voices are saying is driving me mad. Had to turn it off. I believe that everything your saying is 100% accurate. That being said, I’d love you guys to ask the manufacturers who are killing their existing dealers with dealer agreements that forbid them from selling online, how they expect them to compete in an age when the customer doesn’t want a hug and a chat. I talk with dealers everyday that would love to offer packages etc. But because of their dealer agreements, whether they’re mis-reading them or not they’re afraid to do anything that brings their business out of the dark ages. I’d really love to hear the answers to those questions.

Posted by PaulRyanDesign on March 2, 2018

This is a great article Jason. The video is unlistenable because of whatever the background voices are saying is driving me mad. Had to turn it off. I believe that everything your saying is 100% accurate. That being said, I’d love you guys to ask the manufacturers who are killing their existing dealers with dealer agreements that forbid them from selling online, how they expect them to compete in an age when the customer doesn’t want a hug and a chat. I talk with dealers everyday that would love to offer packages etc. But because of their dealer agreements, whether they’re mis-reading them or not they’re afraid to do anything that brings their business out of the dark ages. I’d really love to hear the answers to those questions.

Posted by Julie Jacobson on March 2, 2018

Paul, that is a fantastic question and I am very curious to hear their responses. I’ll shoot you an email.

Posted by Adroit1 on March 4, 2018

I watched the video and it is a recipe for disaster, to say nothing of insulting. I don’t know any reputable integrator that has the kind of employees that behave like the pictures she showed The business model Julie is espousing will drive an integration company to bankruptcy in, at the most, 5 years. She suggests competing with the big box stores. A very quick way to go out of business. They have the volume for pricing and the ability to undercut your pricing in installation as well, as they only pay their employees $15- $18/hr, and it will only get worse as they move further into the installation world.
When I started in this business, the first plasma TV’s were coming out. This was a boon to the installers because the large box TV’s were so huge that it took 4 strong men just to lift 1. The 42” flat screen plasma TV only weighed 87 pounds, but cost $17,000.00. We would make $5000.00 per sale, and it only took 2 men to deliver it. Fortunately for us, the kind of people who could afford one of these had the money to buy other expensive components. We thought selling these TV’s was the best of easy money. My boss had us attend a seminar about 6 months after I started. The speaker( I wish I could remember has name) told us 3 very important things. 1) These prices would not last long, so be prepared to actually earn a living. 2) If you want to stay in business, never compete with the big box stores, only go for the high end customer. If not you won’t last 5 years. 3) You are not selling product, you are selling service, knowledge, and experience. Treat these people as clients, not customers. That was in 1997. I followed that advice. Those at the seminar that didn’t are gone. Julie’s advice to have a business that in any way directly competes with big box stores makes the assumption we are selling product and installation. That is wrong. We are a very small company. Our jobs range in size from a week to 6 months. My 2 techs make over $35/hr plus benefits. Those prices for installing Julie had on the screen would put me out of business in a month. Just the truck roll costs over$100.00 She is also wrong when she says our clients don’t want to talk to us. Mine want to talk all the time. Since I am dealing with a clientele that has more money than they really know what to do with, when they read about new technology, no matter the cost, they want to know if it is something they can use. This means we have to keep up with that technology all the time, because the reason I am installing and integrating their homes is because they trust what I am saying. I am no different than any other reputable integrator. We all strive to be not just the guy who makes their life easier, safer, and more fun, but the guy who will be there for them when something goes wrong, at any time. What Julie described are just installers, and Best Buy and Amazon already have them, at lower rates than you can ever charge.
Her examples of Uber, Amazon, and Vivint are probably not the best. Uber doesn’t pay its drivers what it should. Amazon treats both its vendors and employees like crap. Amazon has 3000 unfair labor complaints against it in Great Britain alone, with thousands more in the US. There are a number of large vendors that are contemplating no longer selling through Amazon, the volume is spectacular, but there is no profit. And Vivint in Ft Lauderdale has been a total disaster because they do not support their product in customers homes.
I have to address PaulRyan Design about the manufacturers that forbid selling their product online. Those products are what separate integrators from the big box stores. The manufacturers are protecting us from the likes of Amazon. We work on margin and labor. Selling them same product online destroys any margin because the only way to sell online is with the cheapest price.
You are the first company I have ever heard of that wants to destroy their margin. If the dealers you talk to want to sell online, let them sell inferior products at no margin. We only sell the best products we can find, and our customers trust that we are selling them that product at a fair price. If a dealer doesn’t like way a manufacturer wants to do business, they are free to buy from another manufacturer. A while ago, we used to sell Marantz. They made us jump through hoops to be able to sell their products. Then one day I saw their products at Brandsmart, a Florida based discount megastore. While not the same model numbers, now their name became associated with cheap. We stopped selling any Marantz that day. That is why certain high quality manufacturers keep their products off the internet.

Posted by PaulRyanDesign on March 4, 2018

@Adroit1- I understand where you’re coming from. I can’t speak for Julie, but the point I’m trying to make is that the landscape is changing like we’ve never seen it. You have the 3 most powerful companies in the world competing for your customers. And the customers are changing. As mentioned the next generation of your customers aren’t interested in sitting down at the kitchen table. They value online reviews more than they value referrals from friends and family. So how do you reach these people? How do you sell quality audio to someone who walks around with earbuds in their ears. How do you sell doorbird over ring? You get my point. This is a conversation that needs to be had. I might be way off the mark. Tell me why I am.

Posted by Julie Jacobson on March 4, 2018

Thanks for the comments, Adroit. My very first caveat in all of this was: “Don’t be so literal.” I espoused no particular business model, just encouraged dealers to explore new ways to think about serving customers with the efficiency, predictability and friction-free experience that companies like Amazon and Uber provide. And yes, we have entered an Uber era but integration companies still look like taxi operators to consumers. Although I thought I stressed it enough in the presentation, I guess I didn’t get across well enough that this was not about competing with Amazon in pricing and service. The same rules apply at the high end. If I’m looking to hire the best limousine service and best personal tour guide for a lavish vacation ... I’m still going to want an Uber/Amazon type of experience.

Posted by Adroit1 on March 4, 2018

I forgot to mention two other extremely important things that make integrators different from the Amazon/Uber models. When the installation is complete, the job is not finished. The integrator must teach the client how to use the equipment that was just installed. Without this 2nd to last step, the entire installation will be a failure. The client must be able to understand the system, and how to use it, without needing to call every time something doesn’t work just the way they thought. Teaching, and a small manual, are critical, more talk. The final is follow up. Once the owner is comfortable with using the system himself, or herself, give them 3 days with it. Then call them after the 3rd day to make sure they are enjoying themselves with the new system and ask if they have any questions, or want anything in the programing different to meet their needs better, again more talk Give them 10 days after that and check with them again, more talk. Wait 3 months and check again, and then contact them every 6 months after that, more talk. This makes them feel like you are watching out for their best interests, it keeps you in their minds for recommendations to their friends, and it give you an opportunity to upsell. That is what separates integrators from Amazon/ Uber, more talk.

Posted by David Haddad on March 4, 2018

I’m seeing a lot of things projected onto this article that I didn’t find in it. If someone can get past the slightly inflammatory language in part of it, and read the article non-defensively, I think it’s an excellent article (fellow posters are welcome to check out our portfolio at vidacom.com before accuse me of “not getting it”).

Every day I choose to do business with firms that make it “frictionless” to do business with them. That does not necessarily have anything to do with being the cheapest. Many luxury experiences are luxury experiences precisely *because* they are frictionless. You’re car needs service and the car dealer drops off a car at your house and takes the old one in for you - that’s a frictionless experience.

Our industry overall should try to do better and making things frictionless. Depending on the market you serve that could mean different things.